Dubai real estate transactions jump 80% to Dh157 billion

Dubai real estate transactions jumped 80 per cent to Dh157 billion in the first quarter of 2023 as compared to Dh87 billion in the same period last year as the emirate’s real estate saw its unprecedented run that started last year and continued unabated this year as well.

The number of transactions also grew by 49 per cent from 26,066 to 38,715 during the comparative period while sales value grew 62 per cent to Dh89 billion.

While taking to Twitter, Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance, said: “The sector is witnessing record growth since the beginning of last year, which reflects the trust in Dubai’s economy and its future, and follows the footprints of Dubai’s D33 economic agenda.”

Driven by the ease of doing business, successful handling of the pandemic and growing confidence in the local economy, residents and well as foreign investors continued to pump billions of dirhams into the emirate’s real estate sector to cash in on higher capital, as well as rentals returns, amidst lower rates than other major cities.

Property developers and analysts are bullish for the whole year’s growth projection on the back of consistent and pro-business policies of the emirate, which would make it one of the best-performing markets in terms of capital appreciation.

Global real estate consultancy Knight Frank has projected a 14 per cent growth in property prices this year, the highest globally for the second consecutive year, as the emirate will see rapid growth in wealth and also attract more millionaires.

Property prices in Dubai, according to Knight Frank, are still much cheaper than its peers such as Monaco, Hong Kong, New York, Singapore, London, Geneva, Los Angeles, Paris, Tokyo and others. Hence, the local property market will offer better returns to investors than the above-mentioned markets, which are already trading at a much higher level.

“Dubai has developed a very pragmatic approach to attracting wealthy residents – and has worked hard to correct a perceived area of weakness, namely length of stay. Visa options used to be mostly short-term and work-related, but with the Golden Visa scheme, longer-term residence becomes a possibility,” said Knight Frank.

Imran Farooq, group CEO of Samana Developers, said the driving factor behind the property market growth is the booming economy of Dubai and the positive effects post-Expo 2020 as more and more people are relocating to the emirate, especially high-net-worth individuals.

“The biggest factor is the golden visa that makes live here for long-term and feel like home. Tax-free personal income tax is again a very attractive point,” he said.

The Samana chief is also bullish for the remainder of the year and expects this momentum to continue.

“All the developers are doing extremely well and Samana is launching 12 projects this year alone.”

Foreign investors growing

The emirate also saw a continued inflow of new property investors in the first quarter as the numbers increased 12 per cent to 13,338 in Q1 2023 as against 11,944 in Q1 2022.

Non-residential investors accounted for 45 per cent in Q1 this year as against 36 per cent in Q1 last year, up by 25 per cent.

These figures echo Henley Global Citizens 2022 report which projected 4,000 millionaires would relocate to the UAE, mainly Dubai, in 2022, driving demand for prime residential properties in the emirate.

Imran Farooq confirmed official figures, too, saying the number of foreign investors in Samana’s projects has grown from 50 per cent to over 75 per cent, mainly from European countries.

“All the markets are performing very well but the interest from the European market is higher this time because the interbank rate is still very low in Eurozone, and people are moving their funds from the European market to Dubai,” he said.

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